The Virtue & Value of Preparation & Patience

[AJ Wong]

If there is one thing I have learned in real estate investing it is that patience and preparation pay. In my own property investment career I can confidently advise myself and clients to take their time. Forcing a transaction is rarely the most prudent course of action, regardless of the perceived opportunity or benefits. 

I share my experiences humbly. In 2018 I was living in Venice Beach California and visited the OR Coast for an extended vacation. My curiosity got the better of me and I toured a 1/1 SFR within waking distance to the beach listed for $135k. It was inhabitable but I saw a lot of potential and eventually agreed to a $90k cash sale. I put 25% down, borrower the balance from a friend and became a property owner for the third time.

 It was a different world, I uprooted my life for the next two years to completely remodel a property with zero experience and not enough capital. The result was still my most beautiful and loved creation to date, which initially was intended to be a retreat and short term rental to support or offset my housing costs back in California. Instead, after just six months of enjoyment, the pandemic and over investment forced me to consider a sale. 

Yes, I could have refinanced. I could have stayed put. I could have taken many alternative courses of action...instead I sold for a 125% cash on cash return. Since I sold the home has doubled in value and I've invested another two years on multiple profitable flips. In retrospect, simply having held the initial property without any remodel or investment would have yielded far greater returns with little to no energy expenditure. 

I was spot on that the Oregon Coast was (and in my opinion still is) highly undervalued but I didn't allow for my patience to catch up with my preparation. 

In the real world when opportunity arises one needs to execute efficiently..especially on the red hot Oregon Coast. Investors are seeking hidden value and potential and often underestimate the demands on time, effort and expense to produce the vision or desired result. The old saying that it takes twice as long and costs twice as much rings true. The bank doesn't care how accurate your projections or spreadsheets are and your numbers won't always make 'cents' to others or as reliably or efficiently as you might be convinced. 

A good mentor told me you can have quality, time and cost but not all three. Most of us learn this the HARD way!

Real Estate investing is a full time sport with the potential for catastrophic financial risk. I've learned that lesson more closely than I'd like to admit but it has prepared me for the bigger spotlights, responsibilities and returns that accompany valuable real world experience. 

In today's market my best advice is to not rush yourself into a starting position. The game is on 24/7/365 and one of the greatest challenges is to commit and STICK to your own game plan. Create a professional team that can assist you with executing and managing your strategy efficiently and a personal mentor circle that has been there before. 

Personally I believe one of the most valuable investor resources at present is a go to lender and real deal real estate broker. Niche lender and investor friendly products can literally make a deal and a creative and experienced broker gets is closed. For example I have several investor clients currently utilizing separate exceptional programs..

- 10% down with no PMI on 1-4 units investment properties

- 100% LTV for medical professionals

- 30% down on an as is coastal commercial property in the 6%'s..

Just having the right lender can completely change the parameters, potential, safety or profitability of an investment and none of these particular transactions happen without that considerable and valuable preparation. 

To date I have never met an investor that was over prepared but I know at least one that neglected the virtue and value of patience :) 

Cheers to a profitable New Year!